The Constant Entrepreneur: Advice for Running a Productive Business

Business Plans

When I talk with a business owner I always ask if they have a business plan. Inevitably the answer is “no”. Which is often followed by a concern that it would take a long time to write a plan, and what good would it be anyway?

Let me be clear. Business plans take various forms depending upon their intended use. When talking about a business plan many people immediately contemplate a thirty plus page book that is required if trying to attract venture funding. Venture capitalists want to know that you have thoroughly thought through all aspects of the business and can make a solid case for extremely rapid growth over the next few years. Now most businesses do not need venture capital, and fewer still qualify no matter how thick the business plan.

A second use for a business plan is to present to a bank to qualify for a loan. What the bank wants to know is a) how much money is needed, b) how will the loan proceeds be used, c) how will the loan be repaid (does cash flow support the repayment), d) what is your record in handling money. So what is important to the bank is a brief narrative that explains your business and a detailed and substantiated financial forecast. Oh, and they will check your FICO credit scores and want to see your tax returns for the prior three years.

The most important business plan is really a roadmap for the business owner. Putting together such a plan is an important strategic exercise for the owner as it forces the owner to really think about the business. The resulting plan becomes a guide, with goals, for operating the business. How extensive should this plan be? In its simplest form, the plan is a single page. What is important is the content, which includes:

1. The vision – What does this business look like in a year, or perhaps three years? What is the annual sales volume? Who are the customers? What services and products will be provided?

2. The mission – What does this business do? What are the core values of the business – of the business owner?

3. Objectives – List the specific goals such as sales volume, new products, number of employees, amount of credit needed, etc.

4. Strategies – List the steps that must be taken, the changes that need to be made, to reach the objectives.

5. Action Plans – list specific actions that need to be taken, who will be responsible, and deadlines

A one page plan like this can be completed, in many cases, in less than half a day. Once it has been completed, review it constantly, and update it as needed.

Will Limkemann
Limkemann Business Advisors
440-871-0976
www.neobizadvisor.com
will@limkemann.net